September 23, 2010

Obama's National Export Initiative & China

With no fanfare from the White House and zero interest from mainstream media President Obama received a week ago the report (as required by Obama's March 11 Executive Order) from the Executive branch's Trade Promotion Coordinating Committee on the National Export Initiative (NEI).

Although mostly focused on policy and the creation of what promises to be another cumbersome interdepartmental and interagency bureaucracy the report does single out China as a major focus for US exports. China is the fastest growing market for American exports for many years now.

The NEI report emphasizes six fairly broad areas of focus for China trade: Green Tech including all aspects of 'green' energy and retrofitting, healthcare (medical equipment is already a major export), transport (think railways including urban transit), tourism (very underdeveloped), agriculture (China is already the USA's second biggest export market valued around $13 billion (US dollars) in '09), and lastly education.

The report mentions the importance of Chinese accession to the WTO Government Procurement Agreement but fails to make it a policy objective. Access to China's government procurement was a requirement for WTO acceptance and so far Beijing has kicked the ball for almost a decade. Most of the investment in China's enormous infrastructure and building boom is state-led via direct Central and Provincial government spending. The USA should focus on opening this market by demanding China adhere to the WTO Government Procurement Agreement versus wasting time on political posturing over the exchange rate of the Yuan.

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